November 2008 News

Outsourcing Prospects for Non-Voice BPOs Good in 2009
Business prospects in 2009 for non-voice providers of business process outsourcing (BPO) services are good to outstanding, according to respondents participating in an industry survey. Almost 65% of respondents said 2009 prospects are excellent to outstanding, and 30 percent said prospects are good. Only five percent of respondents said 2009 business prospects are only fair, and none responded that prospects are poor.

How safe is outsourcing?
A large global firm runs its trading desk out of Mumbai. Bookings for a leading airline are happening out of another office in a neighbouring city, while the telecom infrastructure of an overseas operator is being remotely monitored from another location in the country.A terror attack on any of these sites can have significant implications for corporations in the US and other parts of the developed world as India emerges as the world’s back-office.

Broadband, BlackBerrys save the day for IT, BPO
It was work as usual at all the major IT and business process operating firms in Mumbai. While a few advised their employees to take leave or use flexi-working options, for many it was work as usual because of broadband connections in homes and BlackBerry(s).

Easiprocess buys 500 seater BPO space in Pune
While it may be times of trouble for many BPO’s in India, Bangalore based BPO – Easiprocess is geared up to set up its new office in Pune which can accommodate 500 staff in one shift.The expansion of the new office is in light of prospective third party clients that Easiprocess is confident of securing soon. At present, Easiprocess has two offices in Bangalore – one that is functional and houses 100 employees and another that serves as a Disaster Recovery site. The new office in Pune will be the BPO’s third office in India and will be designed to be more innovative than its current premises called ‘PODCITY’ famous for its futuristic looking work stations.

Attacks add to global crisis woes for outsourcing industry
India’s $52 billion outsourcing industry, battered by a global financial crisis that is squeezing its business clients, faces more short-term challenges in the wake of attacks on Mumbai that killed more than 100 people.Industry officials said prospective overseas clients were likely to put off planned visits to India because of the attacks, even though most software and back-office services firms were operating normally.

Genpact to make foray into the Middle East
Business process and technology services provider Genpact Ltd is looking to enter the Middle East and is currently bidding for business in the market, Chief Executive Pramod Bhasin said on Tuesday.”We are just finalizing our plans in the Middle East, there is a lot of money there, and I think there is a lot of appetite for this kind of work,” he said at the Reuters India Investment Summit.

IT firms unfazed by Obama’s tax plans
IT and IT-services companies seem undaunted by the potential impact from US President-elect Barack Obama’s proposal to repeal tax breaks for companies that outsource certain operations to offshore centers.”I don’t see Obama doing anything terribly drastic. I think he has enough on his plate; he has got a trillion-dollar bailout and probably got another trillion dollars coming on top of that which he has to finance,” Genpact Ltd’s Chief Executive Pramod Bhasin said at the Reuters India Investment Summit.

WNS to stay out of India, sees growth in US & Europe
At a time when BPO and IT firms are becoming more aggressive in the domestic market, BPO firm WNS Global Services has taken strategic call not to participate in the Indian market and stay focused on exports for now. The company will enter other Asia-Pacific markets and also look at developing China as a delivery centre, said group CEO Neeraj Bhargava.

Infosys BPO sees lower 2009 attrition levels
Infosys BPO, a unit of India’s No. 2 software services firm Infosys Technologies plans to bring down employee attrition levels next year, but will closely watch underperforming employees, a company executive said on Tuesday.The number of job-hopping employees in India’s once highly competitive business process outsourcing sector has plummeted in the face of job-security fears fueled by a widening global economic crisis.

IT-BPO union to file PIL against ‘extended’ working hours
The Indian arm of the Union for Information & Technology Enabled Services is planning to file a public interest litigation against the alleged ‘arbitrary policy’ of many Indian and multinational IT/ITeS firms in India who have, for the past two months, reportedly been enforcing longer working hours that violate the daily eight-hour working mandate of the Indian Factories Act, 1948.UNITES, the country’s first union in the IT-BPO sector, is affiliated to the Indian National Trade Union Congress. It claims to have around 10 per cent of the total IT-BPO workforce of 2 million as members, and said the numbers have been dramatically rising over the last two months on the back of lay-offs in the sector. The union is also part of Union Network International, which has over 16 million workers in 13 different sectors from 163 countries.

In downturn, litigation bonanza for Indian legal outsourcers
Amid talk of job cuts and lower-than-expected results, legal offshorers based in India say they are bucking the trend.If the first wave of work for legal process outsourcing companies earlier this year stemmed from the rise in US lawsuits related to the subprime mortgage meltdown, the latest wave builds on that, but is also tied even more directly to the crisis; Indian legal outsourcers are now processing American foreclosures, and valuing the toxic assets at the heart of the trouble.

Outsourcing to Indian BPOs to rise to rationalize cost: D&B
Outsourcing and offshoring to Indian BPOs is more likely to become an even more important part of companies overall strategy as they focus on cost rationalisation in the current global meltdown, according to a report on Indian and IT and ITeS industry by Dun and Bradstreet.The report said that though certain issues have caught the industry off-guard, India is still expected to remain the preferred choice for outsourcing services and outsourcing would remain strong in 2009 too.

India can draw big European R&D offshoring
India has the potential to attract € 8-10 billion investment in R&D operations by European software companies as the continent lowers its traditional resistance to offshoring and outsourcing, a study shows.

Firstsource cuts guidance, but markets already knew
Back-office service provider Firstsource Solutions Ltd, which had held on to its aggressive growth guidance after the June quarter results, has now drastically cut its growth outlook. It now expects the organic business to grow by about 9% this year, compared with the projection of a 17-21% growth earlier. In the second half of the year, the overall business is expected to grow at a rather tepid rate of 3% in dollar terms. The sharp drop in growth rate is partly because of currency fluctuations, adjusted for which growth would still be low at about 8%.

Mid sized US cos eye Indian BPOs for outsourcing
At a time when many Indian BPOs are devising newer strategies to tide over the economic slowdown, many mid-sized companies from US are looking to offshore their services to reduce cost in order to survive the turbulent economic times.Of late, many Indian BPOs are flooded with calls from mid-sized small companies from US with an annual turnover of $1-2 billion who want to outsource their services to cheaper offshore locations like India in order to control their price and cut down on people.

EXL lines up $70 m for foreign buyouts
BPO firm ExlService Holdings is looking at acquisitions of companies that can either strengthen expertise in key verticals or expand its presence in new outsourcing destinations, EXL president & CEO Rohit Kapoor said. The firm is eyeing buys in the range of $50-70 mn.

BPO employees’ union hopes to gain clout as US crisis hits firms
R Karthik Shekhar was at home, technically on a holiday, but still in work mode. Shekhar, the head of a union for business process outsourcing (BPO) employees, sat at his dining room table as he talked to a TV news channel about how workers might be affected by slower-than-expected growth in the technology and outsourcing sector.

McKinsey seeks permission to expand ITeS biz in India
McKinsey Knowledge Centre, a McKinsey Holdings Inc arm, has sought government’s permission to set up a foreignowned Indian holding-cum-operating company to expand its IT-enabled services (ITeS) business. The proposed venture will also make downstream investments.

Mindteck to move 70% outsourcing work to India
After going through a series of mergers and acquisitions, Mindteck, a Bangalore-headquartered IT services company, is looking to consolidate its various businesses which will see more work being moved offshore, to locations in India.The company has changed its sales model by moving 70 per cent of the outsourcing works to India, which was earlier being delivered in the US.

UK’s Serco buys InfoVision for $75 mn
In a first of its kind acquisition of a India-focused BPO by a foreign company, the UK-based $6-billion Serco Group has bought out Gurgaon-based BPO major InfoVision.The deal marks the entry of Serco Group, a business services company, into India. The company has bought a 60% stake and will acquire the rest over the next couple of years.

Rural BPO’s next revolution in Indian IT industry: NASSCOM
Rural BPOs are the next revolution in Indian Information Technology (IT) sector to happen, as the industry gears up to achieve $50 billion export target this year, NASSCOM member Ashank desai said.”The host of rural BPOs that are coming up in the country, is the next revolution in industry to happen, rural BPOs is about creating jobs, Desai who is also the chairman of Mastek, said this at IIM-A confluence here today.

Bad news on Citi side may hit TCS too
TCS, the country’s biggest IT exporter, may see trouble ahead if one of its biggest clients Citigroup sells its business, as cited by media reports.This could also put a question mark on TCS’s decision to acquire Citi’s subsidiary Citigroup Global Services (CGSL) last month along with a long-term contract of assured revenue of $2.5 billion from Citigroup.

BPO attrition down 5-15%
The US financial meltdown has finally managed to do what the business process outsourcing sector has been trying to do for years on end – reduce the attrition rate of employees by 5-15 percentage points. BPOs that were coping with 30-40 per cent employee turnover are now reporting numbers between 20 per cent and 30 per cent.

Women workforce in IT-BPO industry growing: Nasscom
The number of women employed in the country’s IT and business process outsourcing is growing rapidly, accounting for 28 per cent of the total two mn in 2007-08. Stating this here, industry Nasscom President (National Association of Software and Service Companies) Som Mittal said, the number of women in the industry accounted for 24 per cent in 2005-06.Significantly, at the entry-level, women accounted for 47 per cent of the total recruitment in 2007-08, up from 38 per cent in 2005-06, he said here on the sidelines of NASSCOM’s IT Women Leadership summit 2008.

Tata CEO sees opportunity as US banks cut back
The economic crisis may present a growth opportunity for India’s top outsourcing firm, Tata Consultancy Services Ltd (TCS), as US financial services companies look to cut costs, but that opportunity is likely some months away, the company’s CEO said on Wednesday.It does not make sense for Wall Street firms to run their own “captive” back-office information technology operations that perform functions such as order processing, TCS Chief Executive Subramanian Ramadorai told Reuters.

Indian BPOs to buck recession: Accenture COO
Indian outsourcing will buck the recession with certain pockets throwing up growth opportunities, according to Accenture COO Stephen J Rohleder.Mr Rohleder said, “Despite the slowdown, certain outsourcing areas will continue to be strong like business process outsourcing in finance and accounting, learning outsourcing as well as procurement.”

Genpact yet to feel slowdown impact: CEO
Country’s leading BPO company Genpact on Monday said that it is yet to feel the impact of the ongoing global turmoil on its revenues.”The company is yet to feel the impact of the ongoing slowdown on its revenues,” Genpact CEO Pramod Bhasin told reporters on the sidelines of the India Economic Summit 2008 here.

Aegis BPO Services will add 1,000 people per month
Pink slips, layoffs, termination….are the terms in the news recently. These words have conveyed bad news to many employees. But to give you some relief, here are the list of companies that are hiring. According to bank chairman O P Bhat, SBI will hire 25,000 fresh recruitment in this fiscal year. 20,000 in the clerical cadre and 5,000 supervisory staff. Bank of India will hire 10,000 over the next few months. This, on top of over 30,000 fresh recruits in 2008-09. The bank has planned to rope in 75,000 employees in the next two years.

Layoffs: Techies turn to trade union
Nasscom will be meeting the Union for Information and Technology-enabled Services (Unites) has enlisted the help of the Switzerland-based Union Network International (UNI).

Outsourcing one bright light in sea of global gloom
Business outsourcing may not be the most glamorous industry in the world but it is one of the few bright lights amid the doom and gloom of the global financial crisis.The two countries which have benefited the most from outsourcing, India and the Philippines, expect to see some initial pain from the financial turmoil but the industry is confident it will ride out the storm.

Animation parks to generate two lakh additional jobs by 2010: Assocham
Setting up animation parks with hi-tech studios will make India a hub for 3D animated movies to enable domestic animation industry perform all its production activities within the country and not be forced to spend its funds in the US, Canada, Philippines, China and Malaysia for making advanced animated movies, according to a paper on “Will Indian animation industry emerge as the next knowledge destination for jobs” brought out by industry chamber, Assocham.

Fidelity picks up 6.77% in EXL, now holds 21.77%
US-based asset management firm Fidelity Investments has picked up an additional 6.77% stake in Nasdaq-listed BPO firm ExlService Holdings, as per a regulatory filing by the Indian firm. The transaction takes Fidelity’s total stake in EXL to 21.77%.Under US regulations, an investor picking up more than 5% stake in a listed company has to inform the stock market regulator Securities and Exchange Commission (SEC) within 10 days of the purchase. Though the exact purchase amount stands undisclosed, given the share price movement during the 10-day period, the transaction could be valued in the $10-14 million range.

NASSCOM team to meet Obama officials in March 2008
For all its reassurance that Barack Obama’s elevation to the US Presidency won’t take away any joy from the outsourcing party, software industry Nasscom is clearly taking no chances on that front.A high-profile Nasscom delegation will be travelling to the US in March 2009 to lobby officials of the Obama administration, influencers (Senators et al) and key thinktanks to ensure that no nasty surprises greet Indian tech majors on the outsourcing issue.

Slowdown cools attrition in outsourcing industry
First they tried bonuses. Then award programmes, and long-term planning for career. But the US financial crisis has helped Indian outsourcing firms do what they couldn’t quite do on their own: get employees to stick around.Business process outsourcing (BPO) companies have struggled for years with a labour pool largely defined by young workers who hopped from one employer to another, and stayed with one, on average, for only 11 months. But that was before several of the world’s largest banks collapsed, the credit markets froze, and people started to worry more about whether or not they had a job than how good a job it was.

Offshore Outsourcing: Quantifying ROI
Cost, quality and time are the typical parameters used to define success of an offshore outsourcing project; however, there are three critical—but often ignored—criteria that will help you measure actual ROI.

Offshore Outsourcing: Kenya Shows Promise
When examining offshore outsourcing options, Kenya shows a lot of promise for cost savings, however, it has seen its IT services potential slowed by political instability and infrastructure improvement delays. When will this alternative to India and China be viable?

5 Out-of-the-Ordinary Outsourcing Trends
Outsourcing is reaching new levels of creativity as entrepreneurs figure out more tasks that can be sourced elsewhere.Outsourcing exists on a fairly simple premise: If you can do something, there must be someone else out there capable of performing that same task–only cheaper. With VoIP and the internet, almost anything can be outsourced with some time and consideration.

Quatrro eyes PE funding for buyouts
Raman Roy-led Quatrro BPO Solutions is planning to raise $100-150 million from private equity firms to fund acquisitions. The company is particularly looking at a large buy, in the range of $200-300 million.“This is the right time to raise money. There are some very exciting assets available at reasonable prices. We don’t think debt is a viable option at this point. So, our acquisitions will be funded through equity stake sales,” said Quatrro MD Raman Roy. He refused to specify the quantum of funding.

Tech Mahindra to open call centre in UK
Telecom firm Tech Mahindra will open a call centre in South Tyneside, creating about 500 jobs in the UK.The regional development agency One North-East has given the firm 2 million pounds grant to bring the company to the area.

BangaloreIT.biz: Infosys BPO and FirstSource adjourned best BPOs
Infosys BPO and FirstSource Solutions have emerged as the top Indian ITES/BPO Companies, while HTMT Global Solutions and aditya Birla Minacs Worldwide received the certificate of Excellence as the next two leading ITES/BPO Companies.Among the MNC ITES/BPO Companies Dell International Services and Fidelity Business Services India emerged as the best, while Goldman Sachs Services and Global e-Business Operations were given certificate of excellence.

Outsourcing has added jobs in US
While Indian BPOs are worried over the US president-elect Barack Obama’s comments on offshoring and outsourcing , US corporates dismiss them as so much propaganda, reports Gouri Agtey Athale in Pune.“People are overreacting. While parts of the outsourcing industry may have funnelled jobs out of the US, most clients have added jobs in the US through outsourcing.

Democrats win, but BPOs ain’t cheering
The Democrat win in the US elections could at worse mean fewer H1-B visas for the Indian IT industry and at best, a faster recovery for the US economy from the current crisis. Indian firms are hoping it will be the latter.Outsourcing, which has been an issue in the previous US election campaigns, has not been such a big theme this year as the US grapples with the financial crisis. There is also tacit acceptance that outsourcing can no longer be wished away or controlled.

Genpact Q3 net up by 106%
BPO major Genpact today said its net profit more than doubled to $33.6 million for the third quarter ended 30 September, 2008, compared with $16.3 million for the same period in the last fiscal.

Comments on outsourcing need not bother us: Chidambaram
Welcoming the election of Democrat Barack Obama as President of the United States, Finance Minister P Chidambaram on Wednesday said that his comments on outsourcing of services should not bother India.”A comment here and a comment there (on outsourcing of services to India) should not bother us. . . once Obama is in office, he will realise that it is an interconnected world and countries have to work together,” he said.

Obama’s victory bad news for India’s BPO sector
US President-elect Barack Obama is a solid supporter of the growing Indo-US strategic partnership and backs the landmark bilateral nuclear deal, but has strong views about outsourcing of American jobs overseas, a cause of concern for Indian businesses.The 47-year-old, elected as the first black President of the United States of America, is said to have a close affinity with things Indian. He carries a miniature figure of Lord Hanuman for luck and had a picture of Mahatma Gandhi placed in his Senate office.

Industry hails Obama victory; downplays fear on outsourcing
Indian industry, particularly those working closely with US firms, hailed Barack Obama’s victory as the next American President, playing down the fears of an adverse impact on flourishing outsourcing business.“Relations between the two countries will grow further. Bilateral trade is expected to reach $60 billion this year,” President of the Indo-American Chamber of Commerce S K Jain said. India-US trade stood at $45 billion in 2007-08.

Obama Wins; Outsourcing to India Screwed?
Obama’s made it clear where he stands on the contentious issue of outsourcing that has stolen several thousand well paying jobs from Americans and handed them over to the cheaper Indian and Chinese coolies.

Will Barack Obama’s victory affect Indian Outsourcing Industry?
With Barack Obama elected as the 44th President of the United States, every Indian is wondering if his victory will affect the Indian Outsourcing Industry. The million-dollar outsourcing industry in India is looking forward to the United States for its survival. Although the BPO (Business Process Outsourcing) companies are receiving good number projects from the European countries, there is no denying that we still largely depend on the US companies when it comes to outsourcing.

Obama’s outsourcing threat not serious for India: Nasscom chief
The US democratic presidential nominee, Barack Obama’s statement to put a break on outsourcing if elected as American President should not come as a threat to Indian IT/ITeS companies.India’s apex IT , Nasscom, chairman Ganesh Natarajan said Obama’s government, if at all it comes to power, will focus more on creating new job opportunities for its people rather than cutting down on outsourcing.

British law firms outsource to India in a big way
Britain’s biggest law firms are outsourcing jobs related to conveyancing, accident claims and due diligence investigations to India to cut costs.Thousands of Indian lawyers and fresh law graduates have reportedly been employed by British firms for a fraction of the cost if the work were done in Britain.

Campaign outsourcing: Bangalore techies root for Obama
Democrat Barack Obama may not be enthusiastic about outsourcing work to India’s Silicon Valley but that has not deterred a group of techies here from drumming up support for him in Tuesday’s US elections.The Barack Obama Bangalore Fan Club has not only been calling up, SMSing and emailing friends and relatives in the US to vote for him, it has also raised Rs 200,000 (about $4,100) from fellow Bangaloreans as contribution to his election fund!

Obama Nama: Outsourcing firms may feel the jitters
He might be the great American change agent. But US presidential candidate Barack Obama’s win could dash the career hopes of many Indians. His fierce antioutsourcing stance — the subject of many a debate in the past — could spell bad news for the BPO firms and the IT industry.

ITeS slowdown for West but Gujarat firms bask in sun
While global slowdown has hit the US economy hard, ITeS companies in Gujarat have a reason to rejoice. Rupee depreciation will add to the overall revenue of the state companies, expected to touch the Rs 1,500-crore mark, an increase of 50%. What’s more exciting for the companies here is that the slowdown has led to more number of projects coming their way.

Latest Columns

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Columns

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Knowledge Base

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